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AT&T, Verizon and T-Mobile are waging price war, but where's Sprint?

Jared Newman | March 12, 2014
While AT&T, T-Mobile, and Verizon have overhauled their wireless plans and slashed prices, Sprint has mostly sat on the sidelines.

While AT&T, T-Mobile, and Verizon have overhauled their wireless plans and slashed prices, Sprint has mostly sat on the sidelines.

But that could change if Sprint is allowed to acquire T-Mobile, at least according to Masayoshi Son, Sprint's chairman and the president of Sprint majority shareholder SoftBank.

"We need a certain scale, but once we have enough scale to have a level fight, OK," Son said in an interview with PBS's Charlie Rose. "It's a three-heavyweight fight. If I can have a real fight, I go in more massive price war, a technology war."

Is three better than four?
Son is likely trying to sweet-talk regulators during a visit to the United States. Although Softbank and T-Mobile owner Deutsche Telecom haven't finalized a deal, regulation is seen as the biggest hurdle for a potential merger. Just a couple years ago, AT&T abandoned its T-Mobile takeover plans after facing stiff resistance from the Federal Communications Commission. The FCC argued that four major carriers are necessary to promote competition in the wireless market.

T-Mobile bounced back after the failed merger, offering cheaper service than the major carriers while eliminating the smartphone subsidies that lead to inflated rates. T-Mobile also added an early upgrade program for smartphones (since mimicked by AT&T and Verizon), free texting and data use while overseas, a small amount of free data for tablet users, and big incentives for families to switch from other carriers.

T-Mobile's moves have triggered an all-out price war. AT&T and Verizon slashedprices for their respective early upgrade plans, and AT&T started offering $15 per month discounts for users who bring their own phones. Verizon slapped a $10 discount on some of its cheaper two-year contract plans, and this week AT&T cut the price of its basic 2 GB plan by $15 per month. AT&T and Verizon both started offering free texting to international numbers — a move that T-Mobile then duplicated this week.

Sprint stays (mostly) silent
Usually, carriers take turns flogging their customers with policy changes, such as killing unlimited data and curbing early upgrade privileges. The amount of consumer-friendly changes that carriers have enacted over several months is staggering.

But through it all, Sprint has made very little noise. The carrier flirted with an early upgrade program that actually made sense, but discontinued it after just four months. Sprint is now trying to push "Framily" plans, where people can pay separate bills and still share in big discounts. The plans are actually quite cheap — starting at just $55 per month for a single line — but the marketing angle of roping in your friends seems convoluted and just a little desperate. The fact that you can't sign up for a Framily plan online only adds confusion.


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